International Voice Rate To Be Paid In Dollars As Implementation Begins Today

The new International Termination Rate (ITR) for voice services adopted by the Nigerian Government takes effect Thursday.

International Termination Rate is the rate paid to local Mobile Network Operators (MNO) by international operators to terminate calls in Nigeria.

The Nigerian Communications Commission in a document- ‘Determination of Mobile International Termination Rate for Voice Services 2022 Amended’ reviewed the ITR from $0.045 which took effect January 1, 2022 to the $0.10 (N42.38).

In the course of the review, the regulator held meetings with the MNO and International Data Access (IDAs) on April 6, 2022 and June 21, 2022 where they agreed to fix a new rate other than the $0.045 floor rate.

Among the reasons was that the rate approved earlier was the lowest in Africa and it has little impact on a healthy balance of payment position.

But besides the determination of rate, another issue faced by MNO is the problem of naira depreciation.

The naira is trading at N423.8 at the official market, losing N10.18 since January 4, 2022 or 2.4 per cent of it’s value.

At the black market, the currency is trading at N689 against the dollar. It had traded around N710 per dollar in July.

Following the issues surrounding the currency depreciation, the NCC also engaged the Central Bank of Nigeria.

During the engagement, the apex bank notified the NCC of a circular Ref. No. BDS/DIR/GEN/LAB/08/029 of June 2015 which among other things provided that “Nigerian Transit/International Data Access (IDA) Operators must pay Nigerian Mobile Network Operators (MNOs) in foreign currency for service in respect of international in-inbound calls.

“That the IDAs and MNOs may utilize their foreign currency for their business operations whilst all excess must be sold at the CBN I & E window.”

The CBN also believes that payment in dollars would help improve the country’s foreign exchange scarcity affecting several sectors of the economy.

It would also improve liquidity in the I & E Window where investors and exporters source foreign exchange.

The NCC said, “The International Termination Rate for voice services paid by overseas carriers for terminating international calls on local networks in Nigeria shall be 0.10 United States Dollars.

“The ITR will be paid in dollars and so operators will receive an increasing rate in Naira terms should devaluation continue.

“The determination shall take effect from the 1st Day of September, 2022 and will remain valid and binding on licensees until further reviewed by the Commission.”